Marathon Oil Co. v. U.S.

• Decision Date: 30 June 2004
• Docket Number: No. 03-5147.,03-5147.
• Citation: 374 F.3d 1123
• Parties: MARATHON OIL COMPANY and Mobile Oil Exploration & Producing Southeast, Inc., Plaintiffs-Appellants, v. UNITED STATES, Defendant-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

374 F.3d 1123

MARATHON OIL COMPANY and Mobile Oil Exploration & Producing Southeast, Inc., Plaintiffs-Appellants, v. UNITED STATES, Defendant-Appellee.

No. 03-5147.

United States Court of Appeals, Federal Circuit.

DECIDED: June 30, 2004.

COPYRIGHT MATERIAL OMITTED

Brian T. Fitzpatrick, Sidley Austin Brown & Wood LLP, of Washington, DC, argued for plaintiffs-appellants. With him on the brief was Griffith L. Green.

Mark A. Melnick, Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for defendant-appellee. With him on the brief were Stuart E. Schiffer, Deputy Assistant Attorney General, and David M. Cohen, Director. Of counsel on the brief was Carolyn D. Talley, Senior Attorney, United States Department of the Treasury, Financial Management Service, of Washington, DC.

Before CLEVENGER, GAJARSA, and PROST, Circuit Judges.

Opinion for the court filed by Circuit Judge CLEVENGER. Dissenting opinion filed by Circuit Judge PROST.

CLEVENGER, Circuit Judge.

Marathon Oil Company and Mobil Oil Exploration and Producing Southeast, Inc. (collectively "the Oil Companies") brought a breach of contract claim against the United States in the Court of Federal Claims. After appeal to the Federal Circuit and to the Supreme Court, they prevailed, and the Federal Circuit entered judgment in their favor on remand. Marathon Oil Co. v. United States, 236 F.3d 1313, 1315-16 (Fed.Cir.2000) ("Contract Judgment").

The Oil Companies demanded post-judgment interest on the Federal Circuit contract judgment. When the government refused to pay, the Oil Companies brought a new claim alleging that they were entitled to the interest under 28 U.S.C. § 1961(c)(2). The Court of Federal Claims dismissed their complaint. Marathon Oil Co. v. United States, 56 Fed.Cl. 768 (2003) ("Interest Opinion"). We affirm the judgment of the Court of Federal Claims dismissing the Oil Companies' claim for post-judgment interest. We hold that the Oil Companies have not demonstrated a waiver of sovereign immunity for post-judgment interest on final judgments against the United States in the Federal Circuit that unambiguously extends to encompass their contract judgment.

I

In 1981, the Oil Companies purchased interests in oil and gas leases from the United States. In 1990, new federal legislation impacted the Oil Companies' rights under the lease contracts. The Oil Companies sued for breach of contract in the Court of Federal Claims and won, receiving judgments in the amount of over $78 million each. Conoco, Inc. v. United States, 35 Fed. Cl. 309 (1996). On appeal, we reversed, Marathon Oil Co. v. United States, 177 F.3d 1331 (Fed.Cir.1999), but the Supreme Court granted certiorari and reversed again, Marathon Oil Co. v. United States, 528 U.S. 1002, 120 S.Ct. 494, 145 L.Ed.2d 381 (1999), holding that the government had breached its contracts with the Oil Companies. On December 28, 2000, we rejected an argument by the government on remand that the damages award should be reduced, and we affirmed the initial judgments of the Court of Federal Claims. Contract Judgment, 236 F.3d at 1315-16. The mandate issued on February 23, 2001, and the government did not seek review in the Supreme Court. On February 28, 2001, the Court of Federal Claims reinstated its initial judgments in favor of the Oil Companies, and on May 1, 2001, the government paid the amounts specified in the judgments to the Oil Companies.

The amounts paid, however, did not include post-judgment interest on the Federal Circuit contract judgment. The Oil Companies made a demand to the Department of the Treasury for this interest, but the demand was rejected. The Oil Companies next filed this lawsuit seeking post-judgment interest for the period from December 28, 2000 — the date of the Federal Circuit's contract judgment on remand from the Supreme Court — through May 1, 2001 — the date on which the government paid the contract judgment. In the Court of Federal Claims, the Oil Companies argued that 28 U.S.C. § 1961(c)(2) waives the government's sovereign immunity from a claim for post-judgment interest on the contract judgment because the statute requires the government to pay post-judgment interest on "all final judgments against the United States in the United States Court of Appeals for the Federal [C]ircuit." 28 U.S.C. § 1961(c)(2) (2000).

The Court of Federal Claims rejected the Oil Companies' arguments and dismissed their complaint. Interest Opinion, 56 Fed.Cl. at 776. The court stated two reasons why section 1961(c)(2) did not waive sovereign immunity for post-judgment interest on the Oil Companies' contract judgment. First, the court held that "the plaintiffs received their awards ... pursuant to final judgments of the Court of Federal Claims, not the U.S. Court of Appeals for the Federal Circuit." Id. at 773. Therefore, the "`judgment' of the Federal Circuit on December 28, 2000 was not a `final judgment' within the contemplation of 28 U.S.C. § 1961(c)(2)...." Id. Second, the court held that, even assuming the Federal Circuit judgment to be a "final judgment" for the purposes of section 1961(c)(2), the waiver of sovereign immunity for post-judgment interest on some Federal Circuit judgments that is embodied in section 1961(c)(2) did not unambiguously encompass interest on the Oil Companies' contract judgment. Id. at 773-75.

The Oil Companies timely appealed the Court of Federal Claims judgment to us, and we have jurisdiction to hear the appeal under 28 U.S.C. § 1295(a)(3).

II

This appeal turns on the proper interpretation of a "final judgment" as the term is used in 28 U.S.C. § 1961(c)(2), and on the scope of the waiver of sovereign immunity effected by that statute. This court reviews without deference both issues of statutory construction, Ainslie v. United States, 355 F.3d 1371, 1373 (Fed.Cir.2004), and issues of sovereign immunity, Ins. Co. of the West v. United States, 243 F.3d 1367, 1370 (Fed.Cir.2001).

"As sovereign, the United States, in the absence of its consent, is immune from suit." Library of Congress v. Shaw, 478 U.S. 310, 315, 106 S.Ct. 2957, 92 L.Ed.2d 250 (1986) (citing United States v. Sherwood, 312 U.S. 584, 61 S.Ct. 767, 85 L.Ed. 1058 (1941)). Guided by "the historical view that interest is an element of damages separate from damages on the substantive claim," id. at 314, 106 S.Ct. 2957, the rule of sovereign immunity not only extends to create governmental immunity from an interest award, it does so in the guise of the "no-interest rule," requiring consent to liability for interest on a damage award to be "affirmatively and separately contemplated by Congress," id. at 315, 106 S.Ct. 2957. Thus, the waiver for sovereign immunity for interest must be distinct from a general waiver of immunity for the cause of action resulting in the damages award against the United States. See id. at 316, 106 S.Ct. 2957 (affirming that "federal statutes cannot be read to permit interest to run on a recovery against the United States unless Congress affirmatively mandates that result"); Alaska Airlines, Inc. v. Johnson, 8 F.3d 791, 798 (Fed.Cir.1993) ("Interest may not be recovered against the government in the absence of an explicit waiver of sovereign immunity for that purpose."). The no-interest rule applies to claims for post-judgment interest. See, e.g., United States v. N.Y. Rayon Imp. Co., 329 U.S. 654, 661, 67 S.Ct. 601, 91 L.Ed. 577 (1947) (noting that the no-interest rule includes claims for interest "arising out of pre-existing judgments").

Well established rules of statutory construction frame a court's analysis of whether Congress has waived sovereign immunity in a statute or statutory scheme, and they tilt the interpretive playing field in favor of the government's immunity. "In analyzing whether Congress has waived the immunity of the United States, we must construe waivers strictly in favor of the sovereign, and not enlarge the waiver `beyond what the language requires.'" Shaw, 478 U.S. at 318, 106 S.Ct. 2957 (quoting Ruckelshaus v. Sierra Club, 463 U.S. 680, 685-86, 103 S.Ct. 3274, 77 L.Ed.2d 938 (1983) (quoting E. Transp. Co. v. United States, 272 U.S. 675, 686, 47 S.Ct. 289, 71 L.Ed. 472 (1927)) (citation omitted)). A waiver of sovereign immunity "must be unequivocally expressed," or a court must infer that Congress did not intend to create a waiver. United States v. Mitchell, 445 U.S. 535, 538, 100 S.Ct. 1349, 63 L.Ed.2d 607 (1980) (quoting United States v. King, 395 U.S. 1, 4, 89 S.Ct. 1501, 23 L.Ed.2d 52 (1969)); see also United States v. Williams, 514 U.S. 527, 531, 115 S.Ct. 1611, 131 L.Ed.2d 608 (1995); United States v. Nordic Vill., Inc., 503 U.S. 30, 33, 112 S.Ct. 1011, 117 L.Ed.2d 181 (1992); Irwin v. Dep't of Veterans Affairs, 498 U.S. 89, 95, 111 S.Ct. 453, 112 L.Ed.2d 435 (1990); Kalan, Inc. v. United States, 944 F.2d 847, 849-50 (Fed.Cir.1991). If a statute is susceptible to a plausible reading under which sovereign immunity is not waived, the statute fails to establish an unambiguous waiver and sovereign immunity therefore remains intact. See Nordic Vill., 503 U.S. at 37, 112 S.Ct. 1011.

With respect to waiver of sovereign immunity for interest on damage awards against the United States, "[t]he no-interest rule provides an added gloss of strictness upon these usual rules." Shaw, 478 U.S. at 318, 106 S.Ct. 2957. To conclude that a statute waives sovereign immunity for interest:

[T]here can be no consent by implication or by use of ambiguous language. Nor can an intent on the part of the framers of a statute or contract to permit the recovery of interest suffice where the intent is not translated into affirmative statutory or contractual terms. The consent necessary to waive the traditional immunity must be express, and it must be strictly construed.

Id. (quoting N.Y. Rayon Imp., 329 U.S. at 659, 67 S.Ct. 601) (alteration in original).

III

The Oil Companies contend on...